DHCR FACT SHEET #29
Division of Housing and Community Renewal

CONVERSION FROM ELECTRICAL INCLUSION TO EXCLUSION IN RENT
STABILIZED APARTMENTS, NEW YORK CITY

When a building converts from master metering of electricity (the
cost of electricity is included in the monthly rent) to
individual metering, the tenant becomes responsible for paying
for the cost of electricity used in the apartment directly to the
public utility providing the electricity. This cost was
previously included in the tenant's rent but was billed directly
to the owner and it is now charged separately and directly to
each apartment by the public utility.

In order to convert from master metering to individual metering,
an owner must first receive permission from the New York State
Division of Housing and Community Renewal (DHCR), Office of Rent
Administration, by submitting Owner's Application for Termination
of Rent Inclusion of Electric Current [DHCR form RA-70 or DHCR
form TRI-35c] for rent controlled apartments. If the request is
granted, the owner may then proceed with the conversion. After
the conversion is completed, the owner is required to reduce the
tenants' rents on the first rent payment following the
conversion.

The new rent established would be the result of two (2)
reductions. The first would involve removing prior rent
guidelines adjustments for electrical inclusion and the second
would require owners to reduce the stabilized rent of each
apartment by specific amounts based on usage.

The first adjustment, a weighted average based on lease terms,
guidelines increases by lease term, vacancy increases, and the
electrical inclusion adjustments was constructed to determine the
increase in rent from 1974 to 1990. On average, DHCR found the
rent would have to be reduced by 6.6% to remove all guidelines
adjustments previously built into the rent for electrical
inclusion. These adjustments, ordered by the New York City Rent
Guidelines Board, date back to the 1974/75 guidelines year.

After the rent stabilized tenants' rents are permanently reduced
by this 6.6% factor, DHCR then computes the tenants' second rent
reduction, which is based on usage, in two stages.

STAGE 1 - Temporary

Stage 1 lasts for one year and becomes effective on the same date
that the 6.6% reduction in the rent stabilized rent becomes
effective. The rents are reduced as follows:

1)   $25 per month for each studio apartment.
2)   $30 per month for each 1 bedroom apartment.
3)   $35 per month for each 2 bedroom apartment.
4)   $5.00 more for each additional bedroom.

STAGE 2 - Permanent

Stage 2 is a permanent reduction (like the 6.6% reduction) and
becomes effective on the exact date that the Stage 1 reduction
ends. The owner must file a stage 2 application after one year of
converted status. The rent reduction determined in Stage 2
replaces the standard rent reduction determined in Stage 1. In
this stage, the rents are reduced as a result of the owner's
monthly savings due to the building's conversion from master
metering to individual metering. The owner's monthly savings due
to individual metering conversion is determined by a formula
based on the pre- and post-conversion cost of electricity, energy
conservation, and the differing electrical rate structures. The
owner's monthly savings are then shared among all the apartments
in the building and the rents of the tenants are adjusted
appropriately from the Stage 1 level. This adjustment may result
in an increase or decrease from the Stage 1 level.

Owners who fail to file for the permanent Stage 2 reduction may
be subject to overcharge findings and other penalties.

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DHCR Fact Sheets (series of thirty) are issued by the New York
State Division of Housing and Community Renewal (DHCR) as plain-
english informational publications.  For official agency
policies, see DHCR Policy Statements, Advisory Opinions and
Operational Bulletins. Also refer to the Rent Stabilization Code,
the Rent Stabilization Law and various Rent Control Statutes.

Electronic versions of these documents on TenantNet are for
informational purposes only and there is no guarantee they will
be accepted by any court (or even DHCR) as true copies of DHCR
policy. The reader may obtain true copies of these documents from
DHCR.

Every attempt has been made to conform to the original Fact
Sheets as issued by DHCR; TenantNet makes no
representation the enclosed material is current or will be
applied as written.  The reader is advised that DHCR often fails
to properly apply, interpret or enforce housing laws.  Since
housing laws are complex and often contradictory, it is
recommended the reader obtain competent legal advice from a
tenant attorney or counseling from a tenant association or
community group. (rev. 3/13/96) DHCR documents
are public documents; the electronic version of such documents
have been developed by TenantNet and any added value, enhancements
and/or proprietary features are copyright 1994, 1995 and 1996 by
TenantNet. These documents may be freely distributed provided they
remain intact as herein presented, including this and the top
informational banner referencing TenantNet as the original provider.
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For more information or assistance, call the DHCR Rent Infoline
at (718) 739-6400, or visit your Borough Rent Office.

Queens Central Office
92-31 Union Hall St. 4th Fl.
Jamaica, NY 11433
(718) 739-6400

Bronx
One Fordham Plaza
Bronx, NY 10458
(718) 563-5678

Brooklyn
250 Schermerhorn St.
3rd Floor
Brooklyn, NY 11201
(718) 780-9246

Lower Manhattan
156 William Street
9th Floor
NY, NY 10038
(212) 240-6011, 6012
South side of 110th St. and below

Upper Manhattan
163 W. 125th St.
5th Floor
NY, NY 10027
(212) 961-8930
North side of 110th St. and above

Staten Island
350 St. Mark's Place
Room 105
Staten island, NY 10301
(718) 816-0277

Nassau County District Rent Office
50 Clinton Street, 6th Floor
Hempstead, NY 11550
(516) 481-9494

Westchester County District Rent Office
55 Church Street, 3rd Floor
White Plains, NY 10601
(914) 948-4434

Rockland County District Rent Office
94-96 North Main St.
Spring Valley, NY 10977
(914) 425-6575

Albany Regional Office
119 Washington Avenue
Albany, NY 12210
(518) 432-0596

Buffalo Regional Office
Ellicot Square Building
295 Main St., Room 438
Buffalo, NY 14203
(716) 856-1382

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